Asian stocks declined slightly ahead of an anticipated rate cut in Canada and a U.S. inflation reading that could leave the Fed on course to reduce rates again. Investors were cautious, as a 0.3% dip in Wall Street indexes on Tuesday left room for disappointment.
The S&P 500 futures rose 0.1% in the Asia session, while European and FTSE futures fell 0.2% and 0.4%, respectively. The median forecast of economists polled by Reuters indicates headline and core US consumer prices will increase 0.3% month-over-month in November, with no forecasts above this level.
Analysts expect a surprise if inflation meets expectations, leaving markets vulnerable to a rate cut. The dollar is likely to rise if markets pare back the speed and depth of expected U.S. rate cuts. Benchmark 10-year yields were steady in Asia at 4.240%.
Canada’s central bank has already reduced rates by 125 basis points this cycle, but an 89% chance of a super-sized 50 basis point rate cut later on Wednesday could drive bets on additional rate cuts. Broader foreign exchange markets were steady, with the euro and yen trading within narrow ranges.
Gold prices rose above their 200-day moving average at $2,688 an ounce, supported by China’s resumption of gold buying for reserves. Oil prices also gained support from China’s big policy shift this week, with Brent crude futures up 47 cents to $72.65 a barrel.
Source: https://www.reuters.com/markets/global-markets-wrapup-1-2024-12-11